TKO boasted another successful quarter while raising guidance for its year-end expectations.
Its third-quarter earnings trumpeted revenues of $1,119,900 for the quarter and net income of $106.8 million across all its divisions.
WWE accounted for $402.1 million in revenue for the quarter, an increase of $75.8 million from the same quarter in 2024. It accounted for $207.8 million in Adjusted EBITDA.
Media rights, production, and content increased from $227.4 million in Q3 of 2024 to $248.9 million in this year’s quarter. This included the early start of the ESPN partnership for the domestic premium live events, with Wrestlepalooza launching on the Unlimited service on September 20. There was a mention during the earnings call of a net cost attached to exiting the Peacock deal early, but no figure was disclosed.
WWE’s live event for the quarter generated $82.5 million compared to $51.1 million in this quarter one year ago. It was strengthened by the first two-night SummerSlam at MetLife Stadium, along with higher ticket pricing.
Partnerships and marketing continue to escalate with $39.9 million in revenue for the quarter ($21.7 million in Q3 of 2024). TKO’s goal is to achieve $1 billion in this category across all its businesses, with Mark Shapiro stating there would be two major deals announced before the end of the year.
WWE hit $30.8 million in revenue for consumer products and licensing, which was up from $26.1 million in last year’s quarter.
They did confirm that the premium live events deal with ESPN in the U.S. is valued at $325 million in average annual value over the five-year term. WWE remains contracted to Peacock for the NXT premium live events and the WWE Network library rights through March 2026.
During the earnings call, they touted the fact that in 2026, they will stage three events in Saudi Arabia, including the Royal Rumble on January 31. It is the highest number of shows within one calendar year that WWE will host and will conservatively generate $150 million for the company, and perhaps higher for the cost of a major event like the Rumble.
Mark Shapiro bragged about the success of Raw on Netflix, although he shared a crazy statement about the show ranking first in 29-30 countries weekly. Raw never ranks first in any country, nor does it appear in the top ten rankings for that many countries. The October 27 episode ranked eighth globally among television shows and appeared in the top ten for fourteen countries.
Shapiro spoke about the power of the marketing ESPN brings to the WWE and citing the experience with UFC they witnessed. He said it was important to maintain the level of promotion they received for Wrestlepalooza. He also said they were patient, as ESPN wants to grow its app and is hopeful that most carriage deals will allow fans to receive the app with their subscription.
No one asked about the introduction of Big Data + Panel and the impact it is having on SmackDown and NXT. According to Wrestlenomics, SmackDown’s viewership has fallen by 22% and NXT has declined by 15% since the new methodology was introduced in late September. It has also affected AEW programming as Dynamite viewership has dropped by 21% and Collision has fallen by 15%.
Nick Khan commented on its ticketing strategy as the company increased prices in line with the market demands. He explained the strategy of lessening the number of house shows to create scarcity in the markets for WWE events, and it’s worked. He mentioned that ticket sales for the European tour in January are going extremely well, before the Royal Rumble in Saudi Arabia.
The UFC reported revenue of $325.2 million and Adjusted EBITDA of $165.6 million. In the third quarter of 2024, it reported $343.9 million and $195.6 million, respectively. The major difference was that this year’s quarter had one fewer numbered event, and last year included the UFC 306 at the Sphere in Las Vegas, which significantly boosted revenue.
The promotion generated $200.5 million in its media rights division (compared to $216.3 million in Q3 of last year), $43.6 million in live events ($51.4 million), $70.8 million in partnerships and marketing ($74 million), and $10.3 million in consumer products and licensing ($13.2 million).
The third quarter included UFC 318 on July 19 with Dustin Poirier vs. Max Holloway in New Orleans and UFC 319 with Dricus du Plessis vs. Khamzat Chimaev at the United Center in Chicago. They also staged Fight Night events on the road in Nashville and San Antonio, as well as international cards in Abu Dhabi, Shanghai, Paris, and Western Australia.
TKO has updated its full-year guidance with a revenue target between $4.690 billion and $4.720 billion. Its increased target for Adjusted EBITDA is between $1.570 billion and $1.580 billion.
